AUGUST 30th NIFTY VIEW

In Friday's trading Nifty Future had to contend with the high of 5490 in the early trades. In the second half it maintained downward bias and went down to make a weekly low of 5398. It closed at 5416 - near the low of the day. Nifty Future took support at the lower channel - first critical level that was being mentioned for some days now.As is being mentioned for sometime now, market needs to correct and I feel Friday's move has given the first confirmation of the same.If you feel that channel break on the down side could eventually take the market down to much lower levels - just to remind you of the big gap left on the day after the election results, it is still not too late to sell on delivery basis so that buying can be done at the lower levels. the lower level of the channel is near 5000 - a good 400 points below the current level.

Tomorrow, we may see some bounce considering the channel support. However, I would not advise going long at this stage, This bounce may take Nifty Future to 5455 or 5470. At this level, it will be better to go short, with stop loss of 5500. Nifty Future has to cross 5500 to regain strength - which looks difficult considering the sharpness of the fall during the second half of the Friday.On the down side, 5380 and 5350 may provide minor support but eventually market has to seek lower levels in the coming days. Nifty Future may find good support at 5225-5250.

All the best.